New Zealand shares fell in subdued trading conditions, driven in part by investors selling out of other positions to take part in Infratil’s mammoth $1.15 billion capital raising.

The S&P/NZX 50 Index fell
166.39 points, or 1.4 per cent, to 11,698.51. Within the main board, 78 stocks fell, 50 rose and 53 were unchanged. Turnover was $118.4 million with just five companies trading on volumes of more than a million shares.

Trading of Infratil shares was halted at $10.89 before the market opened as the infrastructure investment firm kicked off plans to raise $1.15b to fund the next round of growth at its CDC data centre business.

The first tranche of the equity raising is $1b through an underwritten placement to institutional investors at $10.15 a share, followed by a $150m retail offering that may be scaled or accept oversubscriptions.

“Infratil has obviously been a superstar. People will be queueing up to add some extra funds and I doubt they’ll be troubling the underwriter,” said Grant Davies, an investment adviser at Hamilton Hindin Greene.

“The CDC data centres are proving to be a very, very good investment for Infratil.”

Davies said some investors would be selling out of other positions to participate in the placement, adding to the negative lead out of Europe on Friday, where there was some concern about the upcoming French election.

Electricity generator-retailers also weighed on the market after operating figures from Contact Energy and Meridian Energy showed hydro storage at 72 per cent of the historical average.

Mercury NZ, which also signalled plans to raise $300m through a capital bond offering, fell 3.1 per cent to $6.48, Contact was down 2.8 per cent at $9.17 and Meridian declined 1.6 per cent to $6.27. Genesis Energy slipped 2 per cent to $2.195.

Dairy companies led the benchmark index lower, with Synlait Milk falling 6.3 per cent to 30 cents, A2 Milk declining 3.7 per cent to $7.21 and Fonterra Shareholders’ Fund units slipping 0.5 per cent to $4.10. Data out of China, NZ’s biggest dairy market, was mixed, with better-than-expected retail sales contrasting with weak house prices and softer industrial output and fixed asset investment.

Freightways fell 2.3 per cent to $7.97 ahead of local gross domestic product figures this week. The courier and information management company is often seen as a bellwether for the strength of the local economy.

Spark NZ was the most heavily traded company with 2.3 million shares changing hands. It slipped 0.3 per cent to $4.03.

Among other companies trading on volumes of more than a million, Tower declined 0.6 per cent to 83.5 cents with 1.2 million shares traded, Precinct Properties NZ fell 3.8 per cent to $1.13 on a volume of 1.1 million and Auckland International Airport decreased 0.6 per cent to $7.43 with 1 million shares traded.

Building products companies were also weaker, with Fletcher Building down 3.7 per cent at $2.89, Vulcan Steel declining 2.9 per cent to $7.50 and Steel & Tube slipping 3.2 per cent to 91 cents.

Steel & Tube last week warned its June year earnings would fall short of analyst forecasts, while across the Tasman, BlueScope Steel was downgraded by Jefferies due to the weak construction market in Australia and NZ. Separately, Real Estate Institute figures showed the housing market remained subdued.

Metro Performance Glass bucked the trend, climbing 6.1 per cent, or 0.4 of a cent, to 7 cents, the biggest gain across the main board for the day.

Firms enjoying a positive day were largely outside the benchmark index, with Rakon up 5.3 per cent to 79 cents, Winton Land advancing 5.2 per cent to $2.02, Savor rising 4.8 per cent to 22 cents and My Food Bag climbing 4 per cent to 15.8 cents.

Oceania Healthcare was the best performer on the benchmark index, up 1.9 per cent to 54 cents. A recent report from Jarden analysts was optimistic about the government looking at aged care funding.

Among other retirement village operators and developers, Ryman Healthcare fell 2.9 per cent to $3.65 with 1.4 million shares traded, Summerset declined 2.1 per cent to $9.30 and Arvida Group was unchanged at 92 cents.

Kiwifruit orchardist Seeka was unchanged at $2.40. Today primary sector investment manager MyFarm unveiled a $190m investment vehicle rolling up 11 kiwifruit partnerships into a single entity, with 13 Bay of Plenty and four Northland SunGold properties producing more than two million trays of fruit.

NZX was unchanged at $1.05 after another company signalled plans to delist from the stock exchange and migrate to the USX bourse. Geneva Finance was unchanged at 26 cents after flagging its intentions and sending a notice of meeting to its investors for July 5.